Hot Topics in Total Rewards

  • 24 Oct 2018 8:35 AM | Bill Brewer (Administrator)


    Valerie Bolden-Barrett


    Oct. 24, 2018

    Dive Brief:

    • International auction house Sotheby's has launched a student loan repayment benefit program. The company said the initiative aims to reduce the $1.5 trillion owed by former students in the U.S. Plan participants must have outstanding student debt owed to an accredited loan organization. Former students and parents responsible for paying their children's debt can participate.
    • When an employee makes a student loan payment, Sotheby's will contribute $150 toward the principal amount of a student loan, up to $1,800 a year. The program covers workers for as long as they're eligible, U.S.-based, full-time Sotheby's employees with qualifying student loans.Employees can participate in the program so long as they remain eligible, full-time, U.S.-based employees of Sotheby's with student loans.
    • Sotheby's has partnered with Gradifi, a firm specializing in financial employee benefits, to support the benefit plan. The partnership offers Sotheby's employees advice on college savings programs, refinancing and other related issues.

    Dive Insight:

    Employees are entering the workforce with thousands of dollars in student debt. Financial problems are the greatest distractions on the job for workers, according to one in three respondents in a 2017 study by the Center for Financial Services Innovation. And in a 2018 study by the same organization, nearly half the respondents cited finances as a major stressor. Stress takes a toll on workers' health and their ability to perform their jobs; for employers, that means higher absenteeism, lower retention rates and productivity losses in the millions each year. These statistics alone incentivize employers to intervene, if they can, to help relieve workers of astronomical amounts of student debt.

    In a statement to HR Dive, Gradifi CEO Tim DeMello wrote: "If employers are able to help their employees pay off that debt faster, they're able to alleviate some of the stress; ultimately creating a better quality of life both at work and in their employee's personal lives, and in turn creating a decisive hiring advantage in recruiting highly skilled workers."

    Workers said they would welcome help with repaying their student-loan debt. Nearly half (46%) of participants in a Student Loan Hero survey said they would accept a student loan repayment plan over a 401(k), if they had a choice. And another 53% said they would prefer a repayment program over paid time off. Offering workers the benefit they value most has the potential to enhance engagement​ and raise retention rates. Employee satisfaction and engagement are crucial in a tight labor market, where dissatisfied employees are more likely to leave their current jobs for better pay, benefits and opportunities elsewhere. This is not lost on Sotheby's CEO Tad Smith, who said in a statement that the benefit speaks to workers' satisfaction and engagement. Satisfaction and engagement contribute toward the company's success and the value it delivers to its clients and shareholders, Smith added.

    The IRS has also stepped in to help workers with student loan debt. In August, the agency issued a private letter ruling allowing an employer to amend its 401(k) plan in order to contribute to the retirement accounts of employees paying down their student loans. The hybrid plan has yet to catch on, but it could be a welcome solution to helping workers pay down their student loans, while getting them to save for retirement.

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    Source HR Dive

  • 18 Oct 2018 10:48 AM | Bill Brewer (Administrator)

    Lisa Nagele-Piazza, J.D., SHRM-SCP By Lisa Nagele-Piazza, J.D., SHRM-SCP
    October 17, 2018

    Consider legal and employee-relations risks

    The holiday season is coming, and many employers will be hosting social events at the workplace and offsite. Workers may look forward to participating in the annual festivities, but can you require that they attend? Here's what employment law attorneys said.

    "Under most circumstances, an employer can require an employee to attend a social function during or even outside of normal work hours," said Christopher Anderson, an attorney with Littler in Nashville. But there are a host of legal issues that employers should consider before requiring attendance at a social or team-building event.

    For example, employees may have religious beliefs that prohibit them from attending an event that falls on a religious holiday or where alcohol is served. In these cases, an employee cannot be compelled to attend, Anderson said.

    Rebecca Bennett, an attorney with Ogletree Deakins in Cleveland, suggested that employers create a culture that encourages employees to participate. Find out what employees want and what would truly motivate them, she said.

    Make Exceptions

    If employees resist attending, evaluate their reasons on a case-by-case basis, said Jay Glunt, an attorney with Reed Smith in Pittsburgh. In addition to faith-based reasons, some workers may prefer to avoid social functions due to mental or physical impairments or other legally protected reasons, he added.

    Event sites should be accessible to workers with disabilities, and employees should be excused if they can't participate in a meaningful way because of a disability, noted Erin Galbally, an attorney with Clark Hill in Philadelphia. Employees also shouldn't be required to attend if they are on a job-protected leave of absence, she added.

    Employment discrimination issues can arise if employers discipline workers for not attending social functions. For example, if an employee doesn't want to attend because she is being harassed by her co-workers, disciplining her for not attending could strengthen any hostile work environment claim she filed under federal and state discrimination laws, Glunt noted.

    "It's a balancing act," Galbally said. "The critical point is to understand why the employee doesn't want to go."

    Compensate Employees

    Nonexempt employees must be paid for all hours worked in accordance with the federal Fair Labor Standards Act and state wage and hour laws. So when attendance is mandatory, employees need to be paid for that time at their regular rate of pay and must receive overtime pay, if applicable. "Also, employers may not deduct hours spent at a required social function from exempt employees' salaries," Glunt said.

    If employees refuse to attend an event during work hours, it's probably not a good idea to make them use their vacation time to bow out. "While it may be legal to take this approach, it may not be wise," said Adam Bartrom, an attorney with Barnes & Thornburg in Fort Wayne, Ind.

    Vacation benefits are generally governed by state law. Even though no states require employers to provide paid vacation benefits, many require employers to follow their company policies and practices on using, accruing and paying vacation benefits. If a company's policy states that employees have sole discretion to determine when they use vacation, then requiring them to use vacation days in this way may violate wage and hour laws in those states, Glunt noted.

    Consider Morale

    Employers should weigh the pros and cons of hosting a mandatory social event from an employee-relations perspective, not just a legal one. Legally, an employer can tell workers that attendance is required and that they will be compensated for their time, "but this heavy-handed approach will almost certainly not be well-received," Bennett said. "Furthermore, HR should view employees' reluctance to attend a social function as a window into a potential human-relations or culture issue at the company."

    If employers force workers to attend or risk losing hard-earned vacation, employees can perceive this as insensitive, Anderson noted. "Employers who, in effect, punish employees for failing to attend a social event are damaging employee morale by undermining the very objective the event is designed to accomplish, which is to create community and encourage collegiality."

    The company should view the event through employees' eyes and ask for their help to plan it, Bartrom said. When employees are involved, they are more likely to attend. "This helps avoid the issues of insubordination, required vacation days and diminished morale resulting from mandatory attendance," he said.

    Create Policies 

    Companies that require employees to attend social functions should have a related policy in their handbook. "The policy can be straightforward and brief," Glunt noted. It should state:

    • The purpose of the policy.
    • The type of social events it covers (e.g., the holiday party, summer picnic or annual barbecue).
    • That all employees are required to attend these social events absent extenuating circumstances.

    Employers shouldn't discipline workers for violating the policy, Glunt said. "Participation should generally be excused if employees articulate a reasonable basis for resisting the event."

    Make sure there is workers' compensation insurance coverage for social events, he added.

    Employers should note that they are responsible for maintaining a safe and respectful environment during sponsored social events. If alcohol is served at the function, the company could be liable for injuries or accidents caused by an employee who consumed alcohol at the event, Bartrom said.

    Workplace policies also apply at such events, so employees must display the same level of respect and professionalism as they would in the workplace, Anderson said. As a result, employers have an obligation to enforce their anti-harassment policies by investigating complaints and taking appropriate corrective action.

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    Source: Society for Human Resource Management (SHRM)

  • 15 Oct 2018 7:47 AM | Bill Brewer (Administrator)

    Wages subject to Social Security FICA rise to $132,900 from $128,400

    Stephen Miller, CEBS By Stephen Miller, CEBS
    October 12, 2018

    Starting Jan. 1, 2019, the maximum earnings that will be subject to the Social Security payroll tax will increase by $4,500 to $132,900—up from the $128,400 maximum for 2018, the Social Security Administration (SSA) announced Oct. 11.

    The taxable wage cap usually is automatically adjusted upward each year based on increases in the national average wage.

    About 177 million U.S. wage earners will pay Social Security taxes next year. Among them, nearly 12 million workers who earn above $128,400 will see more of their earnings taxed, according to the SSA.

    Payroll Taxes: Cap on Maximum Earnings

    Type of Payroll Tax

    2019 Maximum Earnings

    2018 Maximum Earnings

    Social Security




    No limit

    No limit

    Source: Social Security Administration.

    FICA Rates Set by Law

    Social Security and Medicare payroll taxes are collected together as the Federal Insurance Contributions Act (FICA) tax. FICA tax rates are statutorily set and can only be changed through new tax legislation.

    Social Security is financed by a 12.4 percent payroll tax on wages up to the taxable earnings cap, with half (6.2 percent) paid by workers and the other half paid by employers. Self-employed workers pay the whole 12.4 percent. 

    For employers and employees, the Medicare payroll tax rate is a matching 1.45 percent on all earnings (self-employed workers pay the full 2.9 percent), bringing the total Social Security and Medicare payroll withholding rate for employers and employees to 7.65 percent—with only the Social Security portion limited to the taxable maximum amount.

    2019 FICA Rate (Social Security + Medicare withholding)
    Employee 7.65%
    (6.2% + 1.45%)
    (6.2% + 1.45%)
    (12.4% + 2.9%)
    Note: For employed wage earners, their Social Security portion is 6.2% on earnings up to the applicable taxable maximum cap. Their Medicare portion is 1.45% on all earnings.

    Additional Medicare Tax

    The tax rates shown above do not include an additional 0.9 percent in Medicare taxes paid by highly compensated employees.

    Under a provision of the Affordable Care Act, the employee-paid portion of the Medicare FICA tax is subject to the 0.9 percent additional Medicare tax on amounts over statutory thresholds that are not inflation-adjusted and thus apply to more employees each year.

    The threshold annual compensation amounts that trigger the additional Medicare tax are:

    • $250,000 for married taxpayers who file jointly.
    • $125,000 for married taxpayers who file separately.
    • $200,000 for single and all other taxpayers.

    Additional Medicare tax withholding applies to wages and self-employment income in excess of the thresholds in a calendar year. "These threshold amounts are not indexed for inflation,"explains an alert from consultancy Buck Global.

    This added tax raises the wage earner's Medicare portion of FICA on compensation above the threshold amounts to 2.35 percent; the employer-paid portion of the Medicare tax on these amounts remains at 1.45 percent.

    The additional Medicare tax should not be confused with the alternative minimum tax on high incomes, which does not involve mandatory payroll withholding. To learn more, see the IRS webpage Questions and Answers for the Additional Medicare Tax.

    Adjust Systems, Notify Employees

    Employees whose compensation exceeds the current $128,400 maximum will see a decrease in net take-home pay if they don't receive an annual raise that makes up for the payroll tax's bigger bite.

    By the start of the new year, U.S. employers should:

    • Adjust their payroll systems to account for the higher taxable wage base under the Social Security payroll tax.
    • Notify affected employees that more of their paycheck will be subject to payroll withholding.
    • Take into account the increased taxes that must be paid for affected positions.
    • Expect some pushback from employees who may want to be "made whole" for their share of the extended tax hit. 

    Social Security Benefits to Increase

    Monthly Social Security and Supplemental Security Income benefits for more than 61 million people in the U.S. will increase by 2.8 percent in 2019, the SSA also announced. The Social Security Act ties the annual cost-of-living adjustment (COLA) to increases in the consumer price index, as determined by the Department of Labor's Bureau of Labor Statistics.

    According to a new 2019 SSA fact sheet, in January 2018:

    • The maximum Social Security benefit for workers retiring at full retirement age in 2019 will increase to $2,861 per month, up from $2,778.
    • The average Social Security benefit will rise to $1,461 per month, up from $1,422 this year.

    The annual Social Security COLA is now based on the increase in the consumer price index for urban wage earners and clerical workers.

    The 2.8 percent increase—the biggest jump in seven years—"means an extra $39 per month for the average retired worker and $67 more for a couple receiving benefits," tweeted Juliette Cubanski, associate director at the nonprofit Kaiser Family Foundation. "This increase is above the 2 percent COLA in 2018 and 0.2 percent in 2017," but also reflects the uptick in inflation this year.

    Pension Considerations

    "These changes will affect benefits for currently retired individuals as well as those contemplating retirement," said Brian Donohue, a partner in the Chicago office of October Three Consulting, a retirement plan advisory firm. "Employers that sponsor defined benefit pension plans that are coordinated with Social Security will also see an impact on benefits earned and payable under such plans," he noted. For example, "a pension formula may provide for 50 percent of an employee's final average pay minus 50 percent of the employee's Social Security benefit. Other formulas provide different levels of benefits based on pay above or below a threshold like the Social Security taxable wage base."

    Income Limits for Benefits Earnings Test

    The 2019 Social Security cost-of-living adjustment also affects the amount that peoplewho claim Social Security benefits before their full retirement age can earn before seeing a temporary reduction in benefits.

    "If you claim early retirement benefits and continue to work, be aware that the money you earn over a certain amount each year may reduce your Social Security retirement benefits (until you reach full retirement age)," wrote attorneys Joseph Matthews and Bethany Laurence at "Such a reduction in benefits applies only to the years you are working. It has no permanent effect on the amount of benefits you'll receive in future years."

    The earnings limit for those who claim Social Security benefits before age 66 (for people born in 1943 through 1954) will increase to $17,640 in 2019, up from $17,040 this year. Social Security will withhold $1 in benefits for every $2 in earnings above the limit for workers receiving benefits before their full retirement age.

    The earnings limit for people turning 66 in 2019 will increase from $45,360 to $46,920. Social Security will withhold $1 from benefits for each $3 earned over that limit until the month the worker turns 66.

    There is no earnings test after workers reach full retirement age. If they continue to work, Social Security will increase their benefits to account for continued withholding, helping to offset amounts that those who claimed early benefits may have lost under the benefits earnings test.

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    Source: Society for Human Resource Management (SHRM)

  • 08 Oct 2018 10:09 AM | Bill Brewer (Administrator)

    Posted on 10.03.18 // by Michelle Cammayo // Compliance

    On the heels of New York State’s first deadline for new anti-harassment laws, California Governor Jerry Brown signed Senate Bill 1343 into law on September 30, 2018.

    SB 1343 amends certain sections of the California Fair Employment and Housing Act so that employers must provide harassment prevention training to all employees. Previously, California employers of only a certain size were required to provide training to managers only.

    Who must comply: Employers with five or more employees—regardless of status. All employees must complete the required training.

    When employers must comply: The deadline to comply with the training requirements is January 1, 2020.

    How is this different than AB 1825? AB 1825 required training for employers with 50 or more employees. In addition, the training was required for supervisors only.

    SB 1343 amends sections 12950 and 12950.1 of Government Code—also known as AB 1825. SB 1343 amends the code to apply to employers with five or more employees as well as requiring ALL employees—both supervisory and non-supervisory—to complete the training.

    What do employers need to do?

    • Post an updated Department of Fair Employment and Housing (DFEH) poster on discrimination in a prominent and accessible location in the workplace.
    • Post a poster developed by DFEH regarding transgender rights in a prominent and accessible location in the workplace.
    • Provide sexual harassment training by the January 1, 2020 deadline:
      • If the training is provided after January 1, 2019, employers are not required to provide training by the 2020 deadline.
      • Supervisors: 2 hours within 6 months of position, and every 2 years thereafter.
      • Non-supervisors: 1 hour within 6 months of position and every 2 years thereafter.
      • If an employee is not hired to work 6 months, training should be provided within 30 days or 100 hours worked, whichever comes first.
      • If a temporary employee is hired by a temporary services employer, the temporary services employer should provide training.
    •  Distribute a DFEH developed information sheet to employees, delivered in a manner that ensures distribution to each employee, such as including the information sheet or information with an employee’s pay.

    DFEH will make video and material available on its website. The material and training courses will be available in English, Spanish, Simplified Chinese, Tagalog, Vietnamese, Korean and any other language that is spoken by a “substantial number of non-English speaking people” as defined in Section 7296.2.

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    Source: Bolton & Company

  • 02 Oct 2018 8:39 AM | Bill Brewer (Administrator)

    Related image

    The HR tech stack has been consistently evolving for decades. From moving to the cloud, to the rise of mobile and video, to big data, we’ve been following this evolution for quite some time. Successful businesses are constantly optimizing new automated processes to further a world-class talent management strategy. In fact, 65% of employersglobally believe HR tech will free up workers to focus on more knowledge-intensive tasks.

    HR tech has already come so far, so where is it going? Long story short - systems are evolving just like we are. Searchers and job seekers aren’t browsing the way they used to, and it’s time to update not only how we reach out, but how we make ourselves available as well. This means making our processes easier, faster and better than they have ever been before to grab attention, keep that attention and get the talent we want.

    It’s no secret that the market these days is candidate-driven, 86% of recruiters and 62% of employers actually feel this way. Here are some key areas of HR tech that are leading the way to a better, more sophisticated recruitment future.

    Natural Language Process

    Natural Language Processing (NLP) consists of AI technology that many feel may be on the verge of thinking and speaking just like us humans. Before you go all “Terminator,” it’s important to understand how this may help in multiple aspects of HR - not just hiring. NLP technology works to actually speak our language instead of simply translating it through computer code, making it possible to distinguish specific emotions.

    Not sure how you could ever use a system like this? When applied to leadership incentives including employee feedback surveys or even chats, NLP tech can be used to gain a deeper look into what employees think and feel about their workplace. NLP provides an unbiased look at your employees that allows you to take immediate action to help the experience of both them and your candidates.

    This system is best used with:

    • Voice-activated systems
    • Consumer digital assistants
    • Amazon Echos
    • iPhones
    • Google Homes

    Not only is this a great way to ensure that your employees are satisfied, but you can also use this system to ask specific questions about data within the business. NLP may include PTO inquires, payroll information or even budget spending. The possibilities are endless.

    Virtual Reality

    If you’ve followed the latest video games or training seminars, then you know that virtual reality (VR) is taking over. A 2017 study found that only 18% of their respondents displayed no interest in VR. This means 82% are interested and shows just a fraction of the amazing growth this technology is experiencing. Simulations are starting to bud in every corner of the world - HR included.

    This technology makes it easier than ever to put new employees in real world scenarios without the risk of them miscommunicating with a customer, messing up a client order or anything else that could only work to cost a company both time and money. Instead, through the use of VR, they can run through everyday tasks that they will be responsible for in order to get the hang of them before working with the real thing.  


    Chances are you’ve used some form of analytics before, but they have never been more important than they are now. Using the latest in HCM solutions, employers can now dive deep into employee information to better understand important aspects of their employee lifecycle such as turnover statistics and reasons, performance and the overall effectiveness of leadership strategies. This insight may also help you identify underlying issues within the company such as inequality and hiring biases.

    Today, this information is being used to go one step further, not only to identify issues but also to prevent them. Through predictive analytics, companies can better pinpoint talent metrics and risks that may arise based on a new hire, leadership methods and more. According to data from Predictive Solutions, workplace injuries can be predicted with accuracy rates as high as 97%. With the help of AI and machine learning, this technology is going above and beyond in order to help you strategize and improve before the issue is even there.

    HR technology has, and continues to, advanced rapidly over the years. There are a number of systems companies can utilize to better track, influence, attract and analyze both candidates and employees. Need a whole solution that helps you every step of the way through the employee lifecycle? Check out ClearCompany’s Best of Breed Talent Management Solution and see how we can help your team today!

    ----- ----- ----- ----- -----  

    Sara Pollock

    As the head of a department in the midst of a sustained period of rapid growth, Sara has spent hundreds of hours interviewing, hiring, onboarding and assessing employees and candidates. She is passionate about sharing the best practices she has learned from both successes and failures in talent acquisition and management.

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    Source: Human Resources Today

  • 27 Sep 2018 9:43 AM | Bill Brewer (Administrator)

    Published: Aug 27, 2018 10:51 a.m. ET

    More employers may move to adopt a student debt repayment benefit as part of their retirement plan

    On Aug. 17, the Internal Revenue Service released a private letter ruling that could make it easier for employers to use their 401(k) plans to assist their employees who are repaying student loan debt.

    Over the last decade, student loan debt has nearly tripled in real terms and, today, Americans hold $1.4 trillion in student debt. Employees are looking for assistance in repaying their student loans, and companies have been searching for ways to tackle the problem.

    The recently issued ruling affirmed that, under certain circumstances, an employer can link the amount of its 401(k) matching contributions for an employee to the amount of student loan repayments made by the employee outside of the plan.

    Participation is voluntary, but a participating employee is eligible to receive nonelective contributions based on his repayments equivalent to what he would have otherwise received if he had made contributions to the plan. If the employee fails to make full use of the employer match based on student loan repayments, the excess match would be applied to any contributions made to the plan. The student loan repayment benefit is subject to nondiscrimination testing, contribution limits, and other requirements for a qualified plan.

    This program should be virtually cost-neutral to the employer in that the employer’s contributions are equal to what they would have been if the employee had contributed directly to the plan. At the same time, it should be valuable to those burdened by student debt who appear to not take full advantage of their 401(k) plan.

    A recent study by the Center for Retirement Research at Boston College found that, while student debt does not discourage 401(k) participation, college graduates with student debt accumulate 50% less retirement wealth in their 401(k) by age 30 than those without. This new option should increase 401(k) balances for this group.

    This is a small positive step toward improving retirement saving. I always worry, however, that without automatic enrollment, too few employees will take advantage of such an option when offered.

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    Source: MarketWatch, Inc.

  • 27 Sep 2018 9:38 AM | Bill Brewer (Administrator)

    Camilo Maldonado


    Personal FinanceI cover the best practices for personal finance and paying down debt.

    Aug 29, 2018, 12:23pm


    A new ruling by the IRS potentially paves the way for workers who make student loan payments to receive matching contributions into their 401K plan.

    Under a new private letter ruling released publicly on August 17, 2018, the Internal Revenue Service signals its willingness to possibly allow companies to make matching contributions to the retirement accounts of employees who do not make 401K contributions, as long as they make qualifying student loan payments.

    Put another way, Millennials who are so burdened by paying off student debt that they’re not voluntarily contributing to their workplace 401K plans, could still receive an employer matching contribution to that retirement plan.

    Now totaling over $1.4 trillion, student loans make up the largest chunk of non-housing consumer debt in the United States. This staggering figure is larger than total auto loans ($1.2 trillion) and total credit card debt ($0.8 trillion). This means that if this ruling were to be expanded and available to all employers, it could have broad effects on the economy and the ability for graduates to be better prepared for retirement.

    Pew found that only 52% of Millennials opt-in to their employer sponsored retirement plans. Some believe that the low participation rates for young people are in part due to being overburdened by high student loan balances and repayment plans. The unprecedented levels of student loans clearly highlights the importance of making and sticking to a monthly budget, but having an additional 401K benefit tied to student loans would be welcomed by debt-burdened professionals.

    The ruling by the IRS makes it clear that their approval of this plan is only applicable to the individual company that applied and ultimately received approval for this plan, but it raises the question of whether it reflects the intention of the government to adjust the law to allow other employers to similarly design their retirement plans to include this student loan benefit.

    In the method approved by the IRS, an employee with student loans would be able to enroll in the plan, make monthly student loan payments, and have their employer make matching contributions into the employees 401K retirement account, up to a certain amount.

    Under the specific plan reviewed by the IRS, the benefit would work as follows. Let’s assume an employee receives compensation of $2,500 during a two-week pay period, or roughly $5,000 per month. As long as the employee makes a monthly student loan payment of at least 2% of their eligible pay or $100 ($5,000 x 2%), the employer would make a matching contribution equal to 5% of the employee’s eligible pay or $250 ($5,000 x 5%) into their 401K retirement plan. To meet the minimum 2% contribution, the employee would still be allowed to make elective contributions to the 401K plan.

    The IRS does mention that:

    The SLR nonelective contribution will not be treated as a matching contribution for purposes of any testing under or requirement of section 401(m). The true-up matching contribution will be included as a matching contribution for purposes of any testing under or requirement of section 401(m).

    Employees without student loans would not be impacted by the ruling, and it would not hurt them since all employees would still be eligible for the same levels of matching contributions.

    It is worth noting that the employer who made this request of the IRS already had a generous plan in place. They match a higher percentage of their employees’ compensation than the employees’ elective contributions. Their employee-friendly stance is further reflected in the fact that they proactively requested this approval from the IRS prior to it being the law, and are at the forefront of this potential legislation. The company’s name was redacted in the official release.

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    Source: Forbes 

  • 26 Sep 2018 9:04 AM | Bill Brewer (Administrator)

    Under a new law, retailers share liability for misclassified truck drivers at California ports


    SEP 25, 2018 | 5:00 AM

    A new California law attempts to resolve a long-running dispute over wages and working conditions for port truck drivers by putting big retailers — who foot the freight bill — on the hook for labor violations by the cargo carriers.

    Senate Bill 1402, which Gov. Jerry Brown signed into law Saturday, is set to take effect in January.

    The labor battle revolves around the 25,000 drayage drivers who transport cargo for short distances along the supply chain that connects the vessels docked at the ports of Los Angeles, Long Beach and Oakland to the nearby rail yards and warehouses. Nearly 90% of drivers are classified by their carriers as independent contractors.

    Unlike employees, independent workers usually have no access to unemployment benefits, disability pay or workers’ compensation. In many cases, trucking companies also pass costs on to drivers, including expenses for fuel, maintenance, repairs, insurance, permits and truck leases. In 2008, the Coalition for Clean and Safe Ports estimated that the average port driver was making $28,000 per year after expenses.

    Domingo Avalos is an example of how the industry has shifted over the years. Avalos, 54, started out driving for Garner Trucking 20 years ago as an employee with benefits. When the recession hit and the work dried up, he sought opportunities with another carrier, and he started moving cargo coming from the ports of Los Angeles and Long Beach as an independent contractor for XPO Logistics’ subsidiary XPO Cartage.

    Avalos didn’t think much of his status until one day in 2014, when one of the containers he was unloading at a rail yard in the City of Industry jolted forward, injuring him. Avalos had to be removed from the yard in an ambulance. The hospital bill amounted to more than $2,000. Avalos alleges that XPO initially refused to cover his medical costs, citing his status as an independent worker. He hired a lawyer, who sent XPO a letter demanding that the carrier cover his bill. Eventually, XPO agreed to pay.

    “The majority of us are from Mexico or Central America,” Avalos said. “We’re not used to having access to workplace protections and many of us don’t speak English well. Companies take advantage of this situation and treat us like second-class workers.”

    XPO did not reply to requests for comment.

    In recent years, a campaign backed by the Teamsters union, called Justice for Port Truck Drivers, has pushed drivers to take action against individual trucking companies, suing them for misclassification and wage theft. According to the California labor commissioner, 987 drivers have filed complaints with the Division of Labor Standards Enforcement since 2011, and they were awarded more than $48 million in unpaid wages and out-of-pocket expenses.

    Trucking companies have criticized the new law, contending it is a backdoor unionization effort and the latest example of California’s tendency to over-regulate the industry.

    “It addresses an issue that has been corrected internally in many cases,” said Weston LaBar, chief executive of the Harbor Trucking Assn., which represents about 100 trucking companies and opposed the bill.

    While the law applies only to port drivers, it comes as workers across many industries — including app-driven gig economy workers — are pushing to renegotiate their status. Ride-hailing companies are reeling after an April ruling by the California Supreme Courtestablished a stricter test to determine whether workers have been misclassified by their employers, making it riskier for Uber, Lyft and other app-based companies to rely on a contractor workforce.

    The port truck drivers have become a symbol of misclassification, and “other workers in contracted jobs will have their eyes on what happens in California,” said Rebecca Smith of the National Employment Law Project. She said the new law is the first of its kind to push the possibility of solving contractor issues far up the supply chain, getting actors with the most negotiating power involved in the process.

    A driver walks past a row of trucks that are preparing to leave their shipping containers at the Port of Los Angeles.

    The law, which started with a bill introduced by Sen. Ricardo Lara (D-Bell Gardens) earlier this year, provides for the creation of a public list of trucking companies that are in violation of labor standards because they have failed to pay wages or reimburse expenses after a final court judgment. If retailers such as Target, Home Depot and Amazon use listed companies for drayage, they will be held jointly liable — alongside the trucking company — for any unpaid wages and expenses awarded to drivers.

    According to Scott Cummings, a law professor at UCLA who has researched labor in the trucking industry, the bill intervenes in a long process where trucking companies — which have little negotiating power along the supply chain — often resist paying court-ordered awards and declare bankruptcy, change names or hide funds in other ways.

    “The bill is smart because it assigns liability to the actors with the most economic power to change the situation,” Cummings said.

    Many of the legal disputes revolve around how much control companies exercise over “independent” drivers. In a complaint filed against XPO with the California labor commissioner in 2016, Avalos testified that he worked on average 11 hours per day, six days a week, and that he was paid at a piece rate per load, independently of how long it would take to deliver the cargo.

    Avalos, who was referred to the Los Angeles Times by the Justice for Port Truck Drivers campaign, alleged the company denied him wages, failed to provide meal and rest breaks and avoided covering out-of-pocket expenses by misclassifying him as an independent contractor.

    Despite being classified as a contractor, Avalos testified that he would receive direct supervision from the dispatchers, who determined his start time and schedule and would call him during the day to ensure deliveries took place in a timely manner. Avalos alleged that he needed the dispatchers’ approval every time he wanted to take time off and was not able to negotiate the price of loads with customers himself. The driver also provided evidence that from 2013 to 2015, when he was leasing his truck directly from XPO, the carrier deducted tens of thousands of dollars from his paycheck for fuel, licenses, insurance and the truck lease.

    In a written objection submitted to the Labor Commissioner, XPO maintained that Avalos was an independent contractor.

    In December 2016, the court concluded that XPO “retained pervasive control over the operation as a whole” and that Avalos was functioning as an employee rather than as a “true independent contractor.” He was awarded in excess of $170,000 in unpaid wages, interest and other expenses. The carrier has appealed the decision in state court.

    The new law is the result of months of negotiations between Lara and various trucking and retail associations. According to an analysis by the Assembly Judiciary Committee, retailers’ concerns were addressed when the bill was amended to include a 90-day grace period from the moment a carrier is included in the list, giving retailers time to get out of existing contracts before joint liability kicks in.

    Jenna Reck, a spokeswoman for Target, confirmed the company participated in a series of “meaningful conversations” over the bill. “We contract all of Target’s transportation services to a number of third-party transportation providers across the country,” Reck said in a statement. “Our contract requires that these transportation providers abide by all applicable laws and regulations.”

    The law creates an exemption from joint liability for retailers that work with trucking companies whose employees are protected by a collective bargaining agreement. Because the vast majority of port drivers are independent contractors — and, under antitrust laws, are not allowed to unionize — the law might incentivize trucking companies to adopt an all-employee model, the companies say, and could potentially strengthen Teamsters’ presence at the ports.

    LaBar at the Harbor Trucking Assn. said he is more concerned that the prospect of additional liability for retailers will accelerate a shift of business from Southern California ports to those on the Gulf and East coasts. About 40% of the country’s container imports and 25% of its total exports flow through the ports of Long Beach and Los Angeles.

    LaBar said some of the association’s larger members have already been asked by retailers to work with them on pricing and logistics planning in other ports, such as Seattle/Tacoma and Houston. However, he couldn’t say which trucking companies and retailers had discussed contingency plans.

    UCLA’s Cummings contends the new law isn’t likely to cause a significant risk of cargo flight from L.A. and Long Beach.

    “It’s the biggest port complex in the U.S.,” he said. “You need trucks. It's a multitrillion-dollar industry. The question is, can we design a system that's fair for everyone, including the people at the bottom?”

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    Source: Los Angeles Times
  • 26 Sep 2018 8:56 AM | Bill Brewer (Administrator)


    Valerie Bolden-Barrett


    Sept. 26, 2018

    Dive Brief:

    • Most companies will enter open enrollment this fall, and more than three quarters of the 1,000 employees interviewed in a new UnitedHealthcare survey said they're ready for it. According to the 2018 UnitedHealthcare Consumer Sentiment Survey, 82% of full-time workers said they're prepared for the annual benefits shopping season. Only 69% of millennials said they felt prepared.
    • Technology has allowed employees to prepare themselves for open enrollment, the study found. More respondents than ever, 36%, said they had compared healthcare plans by doing research on the internet or on mobile apps. More than half of millennials used these tech tools to shop benefits in the past year. The majority of all comparison shoppers (84%) said the online shopping process was "very helpful" or "somewhat helpful."
    • Eighty percent of respondents cited ancillary benefits, such as dental and vision, as "important." In time spent researching health benefits, the survey found that 42% spent less than one hour, 29% spent from one to three hours and 20% spent more than three hours. More than 65% of insured respondents said they researched health plan networks to see whether their preferred providers are in the plans they want.

    Dive Insight:

    Employers may want to note how this survey highlights technology's positive effect on respondents' ability to shop and wisely choose health benefits. Technology has revolutionized access to healthcare and workers are taking advantage of it. A Paychex study released in June found that 73% of full-time employees want and expect to have 24/7 access to their benefits. The study also found that just more than half of employers can accommodate that desire. Employers who are able to replace or upgrade outmoded systems may want to do so to keep up with employees' expectations, bolster retention and engagement, and compete in the struggle for talent in a tight labor market.

    With open enrollment about to begin, and HR trying to get workers signed up with their benefit selections by the deadline, employers need to know how well employees understand their choices. Many employees don't understand their benefits as well as think. In fact, only 10% of employers in a recent HSA Bank white paper said they believe their workers understand their often-complicated health plans. HR can address the problem during open enrollment and throughout the year by communicating about benefits, updates and new offerings in clear detail, using various personalized methods, including tech platforms, in-person meetings and videoconferencing, to deliver the information to workers.

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    Source: HR Dive
  • 26 Sep 2018 8:54 AM | Bill Brewer (Administrator)


    Valerie Bolden-Barrett


    Sept. 26, 2018

    Dive Brief:

    • Emotional stability and autonomy may be predictors of whether an employee can thrive in remote-work situations, according to Baylor University researchers. In two studies involving more than 400 adult workers, a research team measured each worker's autonomy (level of independence), strain (defined as fatigue, dissatisfaction and disengagement) and emotional stability. The team concluded that employers should consider workers' well-being in providing remote opportunities.
    • Published in the European Journal of Work and Organizational Psychologyresearchers found: 1) autonomy is necessary to protect remote employees' well-being and help them avoid strain; 2) employees who said they have lots of autonomy and were emotionally stable seemed to thrive the best in remote-work situations; and 3) those who reported having a high level of autonomy, but lower levels of emotional stability, seemed to be more prone to strain.
    • Sara Perry, lead author of the study and assistant professor of management at Baylor University's Hankamer School of Business, said employees with less emotional stability might not want or need autonomy, which could be why they don't handle remote work as well as others. Perry recommended that employers provide these workers with more support and resources in the event that they need to work remotely.

    Dive Insight:

    Studies on the popularity of remote-work options among workers have been somewhat conflicting. According to one 2017 survey, 74% of employees said they would leave their current jobs for others offering remote-work opportunities, while a 2018 Randstad survey showed 62% of the workers preferred to work in-office. But industry trends point to workers wanting more flexibility, and that includes remote-work options. The challenge for employers is deciding how to best support those who decide to take advantage of remote work.

    Due to the nature of remote work, employers may miss signs of strain or even burnout among remote workers, who sometimes put in longer hours than when they worked onsite, struggle with trying to keep personal and work-related duties separate, or feel isolated from co-workers. Gregory BesnerCultureIQ's founder and CEO, previously told HR Dive that employers can help remote workers, including "road warriors" (those who frequently travel), by training managers to look for possible signs of depression​ or burnout, assigning them mentors to whom they can communicate frequently, and engaging them in as many onsite activities as possible.

    As demand for flexibility grows, flexible work schedules could become the default for many positions. HR may want to consider drafting flexible, transparent policies that specify which positions are eligible for such arrangements and which tools remote workers need to be successful.

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    Source: HR Dive
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